Best Offers Letting Strategy

by Mark Alexander

17:58 PM, 16th February 2017
About 2 years ago

Best Offers Letting Strategy

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Best Offers Letting Strategy

I discovered the Best Offers Letting Strategy about a year ago completely by accident and it blew my mind … here’s the story … Best Offers Letting Strategy

I had owned a property in Thetford, Norfolk for about 10 years and had kept the same tenant from day one without ever having increased the rent. When he vacated, and most unlike me, I asked my letting agents to advertise it at the same price without checking what current market rent were.

The property went on the market just a few days after my outgoing tenant had served notice. A few days after that I called my agent to see how things were going.

“OMG” he said, “we’ve had 79 viewing requests already!”

This got me thinking….  had I advertised it too cheap?

My agent ran some comparables and found that similar properties in the area had recently been let for about £100 more than I had advertised mine for.

Don’t worry I said, please add the following to the text in the adverts on Rightmove and Zoopla …. “best offers over £450 considered”. I also asked him to talk to the outgoing tenant about doing a block viewings the following Saturday. To give my existing tenant an incentive to cooperate and to make the place look nice I offered him an extra £100 on top of his deposit refund if we managed to find a new tenant off the back of the block viewings.

Well …. to cut a long story short over 100 people turned up!

Both the agent and the outgoing tenant were there. The tenant was the best salesman I could ever have recruited. Apparently, he raved the whole time about what an amazing landlord I am 😀

The agents job was easy too. All he had to say was; “well you can see what the demand is. The best offer so far is £X so if you want to get this property you will have to offer a bit more”.

In the end I was offered £180 more than the closest comparable. The referencing checked out and my new tenant moved in on the same day as the old tenant moved out.

I’ve been desperately wanting to try this again but whenever I’ve had tenants serve notice since then it’s been on a property I have subsequently sold.

Possibly the crappiest property in my portfolio (in terms of the property itself) will be vacated in one month as my tenant of seven years gave notice today. The return on equity in this property is so good though, based on the mega-cheap tracker mortgage I have and minimal equity tied up in the property, so this one is a keeper. The property is at Queensway, Halifax.

I plan to advertise it at a ludicrously low rent and see whether the “Best Offers Letting Strategy” works again.

As soon as the agent has taken pictures and put the property on the market I will post a link in the comments section and keep reporting on what happens next.

I won’t necessarily go for the best monetary offer, but I will report on it. I will also consider the quality of the tenant.

Wish me luck!



Comments

Monty Bodkin

10:54 AM, 19th February 2017
About 2 years ago

Reply to the comment left by "Major John" at "18/02/2017 - 19:22":

"If you think it’s purely about the headline rent etc"

" it was written as a rejoinder to the negative commentators."

I've just re-read all the comments and can't see anyone naively suggesting it is purely about the headline rent, care to be more specific?

Robert Mellors

9:11 AM, 23rd February 2017
About 2 years ago

I don't see a problem with the best offer letting strategy so long as this is made clear in the advert so that people are aware that they will be competing with offers from other potential tenants. This is how houses are sold, so why shouldn't it be the way that houses are let.

In relation to the letting agents, yes they should have pointed out that the proposed rent was too low and advised Mick of the market value at the time, but if Mick instructed them to advertise/let at £x amount (whether higher or lower than market rent) then that is what they should do because they are his agent so should do what they are instructed to do.

As someone who does not use letting agents anymore, I like the open viewing process as it takes up far less time to have 20 viewings at once, than it does to have 20 separate viewings. It also lets potential tenants know that they have competition, so they may need to "up their game" either in the rental offer (as in the best offer strategy), or in terms of the level of security they can offer (I mainly let to DSS tenants, so getting good rent guarantors is the usual "security").

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